Can EU carbon border tax be in violation of WTO rules?

Russian Deputy Prime Minister Alexander Novak said that the European Union’s plans to impose carbon emission costs on imports of goods might clash with the global trade rules and threaten the safety of energy supplies, Report informs referring to Reuters.

The EU plans to impose carbon emission costs on imports of goods including steel, cement, and electricity, according to a draft document seen by Reuters. The European Commission has said such a measure would be fully compliant with World Trade Organization rules.

Novak, Russia’s former energy minister, told the ministry’s inhouse magazine that such carbon border taxes could be extended in coming years to oil, natural gas, and coal, key sources of revenues for Moscow’s state coffers.

“Many experts believe that the introduction of (the carbon border tax) may infringe on several principles of the World Trade Organization,” Novak said.

He also called for the need to seek a compromise and warned about possible interruptions of energy supplies.

“Artificial restrictive measures of the traditional fuel and energy sectors may reduce the profitability and investment attractiveness of the sector, and as the result, the threat to the safety of energy supplies will emerge,” Novak said.